Input Tax Credit (ITC) Basics for Small Businesses

Input tax credit lets you reduce the GST you pay on sales by the GST you already paid on business purchases.

Basic conditions to claim ITC

• You hold a valid tax invoice or similar document
• You have received the goods or services
• The supplier has filed their return and the invoice appears in your GSTR-2B
• You have filed your own return

Credits that may be blocked

Some items, such as certain personal-use or specified goods and services, are not eligible for credit. Check before claiming.

Reconcile every month

Compare your purchase records with GSTR-2B before filing GSTR-3B. Credits missing from GSTR-2B should be followed up with the supplier.

Common mistakes

• Claiming credit without a proper invoice
• Ignoring supplier non-filing
• Mixing personal and business expenses
• Not keeping records

Need help?

Our GST team can reconcile your credits and file your returns correctly.

This article is general information, not professional advice. Rules and limits change, so please confirm the current position or contact us.